Features
No Vivendi Shopping Spree
Anyone speculating on the immediate future of Warner and EMI shouldn’t read too much into Universal Music’s parent company borrowing enough money to snap up both labels.
The euro 5 billion ($7.4 billion) that French multinational Vivendi announced it had borrowed April 18 is enough to buy both the major music companies, which analysts currently value at $2.5 billion apiece. But much of that cash has already been earmarked to help fund the euro 7.95 billion ($11.3 billion) purchase of the remainder of French mobile telecom RTL.
The shares were previously owned by Vodafone, which is raising cash by selling off its various minority interests.
Vodafone chief exec Vittorio Colao says his board remains committed to realising maximum value from the company’s non-controlled assets.
Last September Vodafone hived off its 3.2 percent stake in China Mobile for $7 billion, and two months later sold back its remaining interest in Japanese telecom SoftBank for $5 billion.
The rest of Vivendi’s borrowing, which is being provided by a syndicate of 15 banks, will be used to increase its financial security and extend the maturity of a euro 2 billion ($2.8 billion) bank loan due to mature in a year’s time.
In 2010 Vivendi achieved revenues of $41.2 billion and adjusted net income of $3.85 billion.